Dramatic Change in Balance of British Trade with Israel

A dramatic change in the balance of British trade with Israel was revealed with the publication of figures for the first eight month of 1980. They showed that the balance is moving in Israel’s favor faster than ever and that while her exports to Britain are booming, her imports from Britain are falling at the identical rate.

In the first eight months of last years, British sold Israel 184 million Pounds Sterling worth of goods and bought goods from her to the tune of 148 million Pounds Sterling. But this year the position is reversed. British sales to Israel are down 15 percent to 156 million Pounds Sterling while Israeli sales to Britain have risen by 15 percent to 171 million Pounds Sterling.

SOME SURPRISING STATISTICS

But the biggest Surprise is the statistics for last month, which show that British exports in August fell by a dramatic 50 percent — from 20 to just over 9 million Pounds Sterling.

An even greater drop in Israeli demand for British road vehicles is a major reason for this. In the first seven months of this year, Israel imported only three million Pounds Sterling worth of British vehicles compared with 20 million Pounds Sterling worth in the same period of 1979. This is a drop of 85 percent.

INVESTIGATING THE CAUSE

The British Trade Department makes no secret of its deep concern at this trend, especially as Britain’s recent overseas trade generally has been strong. Officials are not sure of the reasons for the fall in sales to Israel which has been her third biggest Middle East market after oil-rich Saudi Arabia and Dubai.

One reason, they suggest, is that Israelis are under increasing pressure to buy home-made goods instead of imports. However, they have no conclusive answer and the Department says it is investigating the causes. One reason often given by Israeli officials is that British companies are afraid of the Arab boycott real or imaginary.

British sales to Israel would, for example, be much higher if they were to include North Sea oil. The previous Labor Prime Minister, James Callaghan, had hinted that Israel might be sold North Sea oil once Britain become self-sufficient in oil supplies and totally independent of the Middle East producers. But although Britain has now passed the point of oil self-sufficiency, this promise has not been fulfilled by the present Conservative Administration.

However, Britain is eager to sell Israel coal for her Hadera power station. Under a three-year agreement signed a year ago, Britain will soon begin to supply 250,000 tons a year. The total deal is worth about 20 million Pounds Sterling at present prices. But this is unlikely to after the two countries trade balance decisively.